2. QUESTIONS
Describe the nature of distribution channels, and
tell why marketing intermediaries are used.
Discuss the different marketing intermediaries
available & state the benefits each of these
intermediaries offers?
Describe the relationship between internet
marketing, database marketing, and direct
marketing?
Describe how firms in the tourism industry are
using internet as a distribution channel?
3. Describe the nature of distribution channels,
and tell why marketing intermediaries are
used.
4. DISTRIBUTION CHANNELS
A distribution channel is a set of independent
organizations involved in the process of
making a product or service available to the
consumer or business user.
Distribution systems can be viewed as the
company’s circulatory system.
Distribution systems provide a steady flow of
customers.
5. DEVELOPMENT OF DISTRIBUTION SYSTEMS
Starts with the selection of channel
members.
Once members have been selected, the
focus shifts to managing the channel.
In Marketing, distribution systems are
traditionally used to move goods(tangible
products) from the manufacturer to the
consumer.
6. DISTRIBUTION CHANNELS…….
In the hospitality and travel industries,
distribution systems are used to move the
customer to the product: the hotel,
restaurant, cruise ship or airplane.
In the hospitality and travel industries,
distribution channels create thousands of
jobs.
It overcomes the major time, place &
possesssion gaps that separates goods &
services from those who would use them.
7. WHY ARE MARKETING INTERMEDIARIES USED?
The company does not have to maintain
several display rooms and a large sales force
in every major city.
Selling through wholesalers and retailers is
much more efficient than direct sales.
It enables the purchaser to have access to
small quantities of products, which inturn
become part of a large order.
8. WHY ARE MARKETING INTERMEDIARIES USED?
Reduces inventory requirements, number of
deliveries, and number of processed
invoices.
Can avoid unnecessary work and shipping
costs for both the manufacturer and the
customer.
Intermediaries can provide economies.
9. DISTRIBUTION CHANNEL FUNCTIONS
Information: gathering and distributing
marketing research and intelligence
information about the marketing
environment.
Promotion: developing and spreading
persuasive communications about an offer.
Contact: finding and communicating with
prospective buyers.
10. DISTRIBUTION CHANNEL FUNCTIONS
Matching: shaping and fitting the offer to the
buyer’s needs.
This includes activities such as manufacturing,
grading, assembling, and packaging.
Negotiation: agreeing on price and other
terms of the offer so that ownership or
possession can be transferred.
11. DISTRIBUTION CHANNEL FUNCTIONS
Physical distribution: transporting and
storing goods.
Financing: acquiring and using funds to
cover the costs of channel work.
Risk taking: assuming financial risks such
as the inability to sell inventory at full margin.
12. NUMBER OF CHANNEL LEVELS
Distribution channels can be described by
the number of channel levels.
Channel level: each layer that performs
some work in bringing the product and its
ownership closer to the final buyer.
The number of intermediary levels determine
the length of the channel.
